Renzi Urges Letta to Quit to Allow for New Italy Government

Feb. 13 (Bloomberg) -- Matteo Renzi, head of Italy’s
biggest political party, withdrew his support for Prime Minister
Enrico Letta and urged the premier to quit and make way for a
new government.

The country needs “to start a new season, with a new
executive that lasts for the entire mandate of this
legislature,” Renzi, 39, said today in a Democratic Party
meeting in Rome. “We thank Prime Minister Enrico Letta” for
his work in 10 months as premier, Renzi said.

The comments bring the intraparty power struggle between
Letta, 47, and Renzi out into the open and may signal the end of
the premier’s administration. The Democratic Party’s support for
Letta has eroded since Renzi, who is also the mayor of Florence,
took over as party general secretary in December.

“It is over,” Francesco Galietti, founder of Rome-based
research company Policy Sonar, said of Letta’s government. “Now
it’s only about damage control and how to sell this transition
to the wider public.”

The legislature that resulted from a general election last
year is due to run until 2018. If Letta resigns or loses a
confidence vote in parliament, it will be up to President
Giorgio Napolitano to decide whether to call snap elections or
instead appoint a new premier capable of commanding a majority
in the existing parliament.

With minimal policy differences between Letta and Renzi,
investors shrugged off the political turmoil. Italian bonds were
little changed with the yield on 10-year notes at 3.73 percent
at 4:50 p.m. in Rome.